Which of the Following Goals Need to Be Addressed for Extending

question 59

Multiple Choice

Which of the following goals need to be addressed for extending credit to customers?

• A) Getting as many customers as possible
• B) Arranging a loan and making regular payments of interest
• C) Keeping the number of bad accounts as low as possible
• D) Increasing the time between a credit sale and cash receipt

---

Definitions:

Hyperinflation

An extremely high and typically accelerating rate of inflation, often causing a rapid erosion of the real value of local currency and leading to a collapse in a nation's monetary system.

After-tax Real Interest Rate

The interest rate adjusted for inflation after taxes have been taken into account.

Nominal Interest

The interest rate before adjustments for inflation. In contrast, real interest rates take inflation into account.

After-tax Real Interest Rate

The real interest rate that remains after adjusting for both inflation and the impact of taxes, reflecting the actual earning power of an investment after inflation and tax effects.